Save the oysters by privatizing them

A new study from the University of Maryland Center for Environmental Science recommends a moratorium on oyster fishing to protect against extirpation and provide an opportunity for recovery of the oyster population, which the authors estimate has declined to 0.3 percent of the historic levels of the late 1800s. (Disclosure: One of the study's authors is my wife, Jennifer S. Barkman.) The study finds that while disease and habitat loss are important factors in the decline of the oyster population, "effects of fishing have been stronger than increased natural mortality." The study's recommendation for new regulations follows a long history of proposed methods to protect oysters in the Chesapeake Bay. The first Maryland law relating to the protection of the oyster fishery was passed in 1820; the first closed season was in 1846.

The Maryland Oystermen Association opposes the moratorium and has lobbied the state to introduce disease-resistant bivalves from Asia as a way to increase the dwindling oyster population (which peaked during the 1884-85 fishing season at 15 million bushels), claiming disease — not overfishing — is the primary danger to oysters. The watermen association's opposition to new regulations also follows a long history of resistance by the oyster industry. Maryland's 1865 legislation requiring oyster harvesters to purchase annual licenses was so unpopular among oystermen that Maryland established the "Oyster Navy" to enforce the law, resulting in numerous confrontations.

The disagreements over the causes of the disappearance and the strategies needed to revitalize the population of the Eastern oyster highlight a long-running feud between competing interests. However, this debate misses the real threat to bay oysters: the lack of private property rights for oyster beds.

Before the General License Law of 1865, oyster beds in Maryland operated like common property, and any Maryland resident could harvest oysters. This followed the mindset that the oyster beds belonged to "the people of Maryland," and any restriction violated a person's rights. The problem with common property is that while in principle it is owned by all, in reality it is owned by none. Since oysters only became private property when they were harvested, and there was very limited ability to exclude anyone from fishing, each fisherman had the incentive to overfish since each oyster not fished and kept by one fisherman was fished and kept by another. Not surprisingly, overfishing followed and the "tragedy of the commons" ensued.

Government ownership and control of the oyster beds, the de facto arrangement since 1865, have not and cannot solve the problem either. Government ownership suffers from two serious flaws. First, decisions are influenced by political pressure, since political costs and benefits to the legislators are important factors in how the resource is allocated. Politically connected interest groups often have the greatest influence on policymakers because their constituencies either stand to gain the most or lose the most from proposed policy, giving them the greatest incentive to become informed and lobby in accordance to their interests. Oystermen have a long history of applying political pressure in Maryland politics, as was noted by The Baltimore Sun as early as 1905.

Second, government ownership also prevents mutually beneficial exchange. Both environmental and oystermen groups will consider their own interests regarding oyster harvesting but have little if any incentive to consider the interests of others. What benefits do oystermen receive if a moratorium is passed? What benefits do environmental groups receive if oysters are fished at a rate they find unacceptable? Government ownership prevents the two groups from coordinating a mutually beneficial exchange and encourages lobbying from both sides, preventing a permanent victory for either party.

Fortunately, private property rights permit mutually beneficial exchange and provide incentives for proper use and conservation. Privatizing the oyster beds would allow groups to quantify how much they value oysters. Environmental groups could purchase beds and prevent fishing, or lease harvesting rights with private regulations and use the money to purchase other oyster beds. The Audubon Society and Nature Conservancy already do this for other natural resources. Oystermen could purchase the beds and continue fishing, but they would now have the incentive to manage the beds wisely so future use is possible.

The fate of the Eastern oyster is too economically and environmentally important to be left to government ownership. Both common and government ownership have not stopped the decline of the oyster population. For the sake of environmental groups, oystermen and oysters, we should privatize the oyster beds.

Jared A. Pincin is an assistant professor of economics at The King's College in New York City, where he teaches economic policy. His email is jpincin@tkc.edu.